Poor Profits, No Investment Equals Downgraded Service

Part 1 – Forwarding Agent’s View

QCS: FRA Cargo Train Is Being Derailed

This is today’s vicious circle in air freight: poor profits induce investment weakness, leading to downgraded services.
In this initial report we present the view of a forwarding agent.
The tonnage throughput at major European hubs, frequently documented in this online platform, is going through the roof. But the flip-side of the coin is that complaints about massive
delays and problems with imports and exports caused by poor handling performance are rapidly increasing. For instance in Frankfurt, prompting the German Freight Forwarding and Logistics
Association (DSLV) to speak of a continuous “handling disaster,” harming the entire economy.

Among the critics claiming that the handling situation at FRA’s Cargo City South runs the risk of getting out of control is Stephan Haltmayer, CEO of Frankfurt-based agent Quick Cargo
Service (QCS) with whom we spoke.

In pressing cases QCS CEO Stephan Haltmayer jumps in as on-board courier to deliver urgent shipments in time  -  photo: hs
In pressing cases QCS CEO Stephan Haltmayer jumps in as on-board courier to deliver urgent shipments in time – photo: hs

Stephan, are the allegations tabled by the industry association in accord with many members of FRA’s local cargo community really justified?


Yes, the airport was ill prepared to handle the huge volume increase we have experienced lately. Difficult to understand since the tonnage upswing started as early as September 2016. The
basic problem is that the ground handling companies are understaffed, resulting for our trucks in loading or unloading times taking between 16 to 20 hours, a regrettable situation that
unfortunately has meanwhile become standard. So air freight has moved into the standstill mode. The excessive waiting times reduce road feeder capacity and raise costs which somebody has to pay
for. Actually, airlines should insist that their ground handlers perform according to their contractual obligations, loading or unloading trucks within a time frame of one to two hours. However,
this is not the case, causing the handling drama we are witnessing, severely damaging the reputation of FRA as main European cargo gateway.

When looking at the situation in depth, which are your main points of criticism and what should be done to get air freight flows on track at Rhine-Main airport once again?


The main shortcoming is that Frankfurt is still missing an IT-based tool allocating fixed loading and unloading slots for trucks when delivering or picking up shipments at any of the local
ground handlers’ freight terminals. Instead, all happens in an uncoordinated manner, leading to jams, long waiting periods at peak times, severely aggravating the already existing problems caused
by the fast rising tonnage.

Meanwhile, things have developed so awkwardly that Frankfurt’s reputation as fast and efficient cargo gateway is harmed.
We feel that the airlines are clearly in the lead to take action, because it’s them and not the forwarders who have a contractual relationship with the ground handlers. In my view, things
have got out of control because in the past, carriers have not taken the problem seriously enough, evidenced by the fact that they never advocated long-term solutions nor did they try to get into
serious talks with forwarding associations. Now however, the wind seems to change slightly. This, because it’s the carriers that are increasingly suffering under the worsening conditions. They
slowly seem to realize that they should step down from their pedestal, start negotiations with forwarders and ground handlers to ease the situation and get things back to normal step by
step.

Some trucking companies speak of waiting times exceeding 20 hours which their drivers and vehicles are facing in Frankfurt. Can you confirm or are such claims horror stories without substance?

 

As said, the ground handling companies are understaffed and therefore we all are currently experiencing intolerable loading and unloading times. As a reaction to the FRA mess, we at QCS
started trucking some of our shipments from Frankfurt to Amsterdam and Paris CDG because in both cases our goods are faster in the air there compared to FRA. But again, due to vehicle shortage
the availability of road feeder capacity in the market is severely limited.

Waiting at airports costs time and money. Which brings up the question who pays for the trucker’s unproductive waiting time at the end of the day, the ground handlers, airports or forwarders?


In my opinion these extra costs have to be paid by the airlines. We carry our shipments within a certain time-frame from their collection points to Frankfurt’s Cargo City South. If there are
any traffic jams or personnel shortages at the handlers’ terminals we feel not responsible for having caused these hiccups. Again, above all it’s the airlines that should take action.

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In a nutshell, are the current problems FRA is facing homemade and therefore unique or do they reflect alike shortcomings at other European freight hubs as well?


London Heathrow recently sent a message to their customers apologizing for – I quote: “repeated congestions and severe delays, including freight that has missed booked flights due to massive
backlogs.” I also heard of severe problems at Liege and major backlogs at Italian airports reported by forwarding agents. In contrast, AMS seems to perform somehow better, providing perhaps some
comfort for the slot fiasco they just went through. Schiphol’s big advantage, compared to Frankfurt, is their automated delivery system which informs truck drivers via their cell phones about the
availability of gate slots at warehouses, enabling timely off-loading of goods or pick-ups. Further to this, Schiphol offers haulers dedicated parking facilities where drivers can wait until a
ramp gate is free. But the bottom line is that airlines have squeezed their handlers over years like a lemon, demanding constantly lower charges. This impacted the agents’ margins negatively,
leaving no room for investments in infrastructure or qualified personnel. Now, the carriers are paying the price for their selfish policy. 

Are there any remedies on hand to sustainably improve the situation on the long run, for instance, paying ground handlers more money for their services enabling them to hire better qualified
personnel?


You are hitting on the basic problem, because in my eyes the carriers are trying to save money at the wrong end. Awarding a contract to the cheapest bidder can seldom result in high handling
quality. It might work in off-peak seasons but not in times where volumes are going through the roof.

On the other hand, ground handlers must ask themselves as well if they have done everything right to cope with the challenge of high rising volumes, labor shortage and low wages leading to
work overload and warehouse congestions, particularly during peak seasons and Christmas time. I doubt that they have!

Interview: Heiner Siegmund

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Source: Cargoforwarder

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