

March 2010 Newsletter
Kudos To Pilots Aiding Haitian Relief Efforts
The enormous tragedy that has swept over the tragic
island of Haiti is almost too much for the human mind to
comprehend. In a matter of seconds, what was previously
a barely functioning nation became a totally chaotic
island with no economy, no government, no functioning
security forces and millions of people with nothing more
than the clothes on their backs. International aid was
swift with hundreds of millions then billions of dollars
being allocated for the stricken people of Haiti both by
governments and private organizations. But how to move
the thousands of tons of relief supplies from donor
nations to Haiti? How to get the food, medicines,
clothing and rebuilding equipment to where they were
most needed? Airports were virtually out of action and
the principal seaport was in a state of almost complete
disrepair.
"Flying into and out of Haiti
became a test of pilots’ skill,
experience and nerve never
experienced flying under
normal, rigid flight rules.
Pilots and ground crews
improvised to ensure
precious supplies arrived with
no damage to the cargo."
Governments and private aid organizations appealed to
pilots around the world to fly aircraft to the few
Haitian airports that were even partially open to
traffic. Thousands of cockpit crews volunteered to fly
to airports, ranging from the barely functioning
principal airport in Haiti’s capital, Port Au Prince, to
dirt strips scattered about the mountainous country.
Flying into and out of Haiti became a test of pilots’
skill, experience and nerve never experienced flying
under normal, rigid flight rules. Pilots and ground
crews improvised to ensure precious supplies arrived
with no damage to the cargo. Improvisation was the order
of the day as conventional rules and regulations were
thrown out the window. The regular control tower at Port
Au Prince Airport had collapsed and was completely
unusable. Instead, a card table was set up and placed
adjacent to the only useable runway. Ground controllers
stood by the card table guiding traffic by hand held
radios.
Many of the pilots participating in the Haitian relief
efforts were captains and first officers of cargo
airlines who were familiar with older aircraft being
used in the Haitian airlift. Aside from military
airplanes which were among the newest in the U.S. Air
Force, it was the older DC-10s, DC-8s and even more
ancient aircraft pulled from their parking spots in
deserts, that dominated the skies over Haiti. You can’t
land a 747 on a dirt strip with car headlights as your
only means of illumination. All of the pilots deserve
kudos, but the cargo men and women proved their worth
many times over with hundreds of flights under the most
primitive conditions—with no room for failure.
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TSA On Target At CII
CII now has five staff members being trained in airport
security. All have passed the TSA exams and are fully approved
screeners. CII is proud to announce that our company is the only
consolidator at LAX which screens all cargo. Two of our five
staff members have been promoted as supervisors. School is not
over for them, however. They are spending two half days per week
studying for the IATA basic course certificate. Our current
staff of thirty skilled, dedicated people with specific skills
for today’s complicated cargo environment is a far cry from
CII’s beginnings sixteen years ago. Then, CII had a grand total
of myself, plus two employees.
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J-I-T Manufacturing Backfired Catastrophically at Toyota
Toyota has gotten the biggest black eye in the auto industry
since General Motors’ President Charlie Wilson declared some
fifty years ago, “what is good for GM is good for the country.”
Since the news first broke that Toyota was suffering from
serious manufacturing defects for almost all of its car lines
including its crown jewel Prius, the media has wasted no time in
excoriating the Japanese auto maker for its initial “coverup”
and then its milquetoast response to the enormous problems
facing it. The head of Toyota, who reluctantly came to
Washington to testify, literally bowed to his customers and the
public at a press conference to apologize for the company’s
“many mistakes.” That’s not enough. What is needed is a fresh
look at Toyota’s production systems. What has been lost in the
furor over the auto recalls is exactly why this breakdown in
quality control occurred. One of the principal reasons, in my
opinion, is the company’s obsession with the Just-In-Time or
J-I-T system of manufacturing. Ironically, the concept was born
at Toyota in the 1980s to supposedly reduce waste and create new
efficiencies in production.
"The company was so
determined to increase
production with the title,
“biggest car maker of them
all” as the glittering prize,
parts were rushed to the
assembly line without
adquate inspection and
testing."
Toyota overplayed its hand. The company was so determined to
increase production with the title, “biggest car maker of them
all” as the glittering prize, parts were rushed to the assembly
line without adquate inspection and testing. A key element in
this approach was to reduce the number of suppliers so that
parts could be supplied on a greater scale. When quality issues
arose, the lack of secondary and even tertiary suppliers became
critical. The risks of J-I-T are magnified when companies like
Toyota expand globally and sell their products all over the
world. A recall of a few thousand units can be easily handled by
the manufacturer. A recall of 8 to 10 million units is a
catastrophe. It will be interesting to see if Toyota modifies
its manufacturing systems, relying less on just in time delivery
of parts, to a more balanced approach where sufficient inventory
is on hand in case of production problems. The Japanese are a
stubborn race. But a huge loss in market share may change
Toyota’s thinking as well as other manufacturers who rely
excessively on Just-In-Time.
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Whitney Houston Tour Calls On Backstage Cargo
Singer Whitney Houston now is in the midst of one of her
longest and most important tours in her professional
career. After staying out of the concert spotlight for a
number of years, Whitney has undertaken an extensive,
and exhaustive, tour encompassing Korea, Japan,
Australia and Europe. Because of the importance of the
tour, the Houston organization conducted a massive
search to find a transportation company that would move
the many thousands of pounds of equipment on time, for
delivery in flawless condition at each appearance.
Houston management chose Backstage Cargo, the
entertainment division of Consolidators International,
to handle the entire logistics of the tour. The Houston
people were extremely impressed with Backstage Cargo’s
record in meeting precise delivery schedules, with no
damage nor injury to the expensive sets and equipment
needed for a modern tour. The old days when Frank
Sinatra would show up for a concert just in his dinner
jacket and with no props, are gone forever. Backstage
Cargo was pleased to be chosen as freight forwarder for
the tour because of Ms. Houston’s record of
accomplishment in her years as an entertainment super
star. Selling almost 200 million records during her
career and winning a number of Grammies in the process,
starring in such films as The Bodyguard, Ms. Houston has
been a star of the first magnitude for many years.
As CII’s chief operating officer, Peter Lamy, commented
re the tour which started in February and will last
through the spring, “there is no room for error when
moving concert equipment. Whatever the obstacles,
equipment must be up on that stage in perfect working
order before the artist sings one note.”
"...there is no room for error
when moving concert
equipment. Whatever the
obstacles, equipment must
be up on that stage in
perfect working order before
the artist sings one note.”
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Tuna Another Success Story
When we began working with the tuna industry in the
Western Pacific, little did we realize what an excellent
source of business this “niche” market would become. In
less than a year, our tuna business has gone from zero
revenues to fully one fifth of our total volume. We are
active both in air and sea traffic. CII now loads a
minimum of one 40' FCL container per week into Pago
Pago. Our deliveries by air also are growing. Major
producers like Star Kist and Chicken of the Sea
appreciate our competitive pricing, reliable and
hassle-free delivery. After a major earthquake and
tsunami hit the Samoan islands last autumn, CII was
among the first companies delivering relief supplies in
addition to replacement equipment for the canneries and
tuna fleets that had been wrecked after the temblor.
Recession or no recession, Americans love canned tuna.
It is the second most popular fish in American diets,
beaten only by shrimp. CII is doing its best to maintain
adequate supplies of this favorite sea food.
"After a major earthquake and
tsunami hit the Samoan
islands last autumn, CII was
among the first companies
delivering relief supplies in
addition to replacement
equipment for the canneries
and tuna fleets that had been
wrecked after the
temblor."
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Air Freight Signposts Confusing
What to make of the current air freight scene? On one
hand, 2009 was the worst year in air cargo history with
a cumulative drop of about 20 per cent in international
traffic and a truly staggering decline of about 35 per
cent in U.S. domestic volume. Yet, just as almost
everyone in the industry was declaring its last rites,
the industry sprang from the dead. During the last few
months of 2009 and so far into 2010, air cargo has taken
on a new life. Volume is up considerably with forwarders
scrambling for space. One extreme example; cargo
activity at Hong Kong’s International Airport has jumped
fully 50 per cent during the past month.
"Yet, just as almost
everyone in the industry
was declaring its last
rites, the industry sprang
from the dead."
The usual gaggle of consultants and other assorted
experts have lost their compasses. During “normal”
economic times, consultants can predict with a fair
amount of accuracy the growth in air freight year over
year. The past few years have been anything but normal.
During the past three years, cargo revenues have dropped
by almost 40 per cent. Just to match the 2007 numbers,
air freight volume will have to increase a hefty 50 per
cent by the year 2013, an almost impossible task. Of
course, it all depends on the global economy. It still
is too early to predict with genuine certainty the size
and shape of an economic recovery. The U.S. seems to be
pulling out of an economic quicksand, but Europe is
sinking deeper into it. Asia remains the light at the
end of the tunnel. How will this uneven recovery
translate into air freight growth? It’s anybody’s guess
at this point.
Air freight people are so preoccupied with our segment
of the airline business, we rarely look at the “big
picture”—the airline industry as a whole. Yet the health
or lack of it affects our part of the business
profoundly. If truth be told, the airlines, particularly
the domestic side of the business, has been in a state
of decline for almost ten years! From a peak of 542,000
employees in 2001, that figure has shrunk to 380,000 in
2009. Combination passenger and cargo revenues have
fallen a record $33 billion last year. It seems
incredible, but during the past ten years there has been
a net loss of 1,300 aircraft despite all the deliveries
of new airplanes from Boeing and Airbus. Scheduled
departures dropped almost 20 per cent in 2009 compared
to 2001. If it weren’t for low cost carriers like Jet
Blue and AirTrans entering the picture, the drop would
have been even more severe.
It is hard to accept the fact that the airline industry
has become a mature business.
"During
the past three years,
cargo revenues have dropped
by almost 40 per cent. Just to
match the 2007 numbers, air
freight volume will have to
increase a hefty 50 per cent
by the year 2013, an almost
impossible task."
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Julian
Keeling
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