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Exclusive - AMS is not interested in attracting the Alibaba’s of this world

 

 

For the last few years, Amsterdam Schiphol Airport has seen its cargo volumes decline due to slot scarcity. Further growth will have to be supported by efficiency and sustainability, says Head of Cargo Bart Pouwels (BP).
For Alibaba, Amazon and alike traders managing the entire supply chain autonomously from A to Z, AMS is not willing to roll out the red carpet, he reveals. Because of the low value of their volume-driven product that doesn’t deliver benefits for Schiphol but causes headaches instead.

Bart Pouwels is Head of Cargo Amsterdam Schiphol Airport - photo: CFG / ms

CFG: Amsterdam has never tried to attract an integrator, why?
BP: “The infrastructure of our hub is designed to offer connections for people and goods. Air cargo is making use of that infrastructure via passenger flights as well as full freighter flights.
Express cargo is different. It only travels during the night. Express carriers cannot have their hub in AMS simply because of limited night flight capacity.
In AMS we have DHL Express and FedEx. Both of them use AMS as a spoke to their EU hubs. We did not roll out the red carpet for Alibaba.

Why not?
This is a volume-driven product with low value. Who is able to make money on that? You receive a multitude of parcels, demanding extra inspections. Who is happy with that? Ask the customs! The chain is so fragmented that no earnings will stick to it. What I am interested in, is e-commerce I can make money on, like pharma.

And when I speak about e-commerce, I mean the digital process, meaning that a consignment can be allocated to the right person from the start, involving airline, forwarder and consignee. Only then can you pre-sort and forward the data in advance. Today these consignments are stored for too long in the most expensive square meters of the country. In the other scenario, I can produce more per m².
 
Does the slot problem impact further growth? 
“In 2008 all the stakeholders in the widest sense, so also including residents, politics and the local communities, were invited round the table and this is when the present overall limitation of a maximum of 500,000 movements per year was agreed. At that time, nobody seemed to worry at all. But this cap had been reached in 2017, which was unexpected. You cannot hold one single segment accountable for that. They all want to fly more. The consumers’ methods of buying have driven the demand for more air freight.”

“So, here’s your dilemma: if you see that the market is growing, you want to grow along with it. As for cargo, our infrastructure has been designed for a mere two million tonnes. Raising that can only be achieved through more efficiency in the processes, through spreading out.”

By what sort of scheme?
“You start with data sharing. To give a good example: we have 5 doorways to ground handling and the freight forwarder books with airlines served by all these handlers. So, he has to deliver his consignments at all five. That is not an efficient process.”

“Through Smart Cargo we have developed a remote parking system in which the trailer is disconnected from the tractor and we have a team in place that unloads consignments out of the truck to take them to the respective handler. For a trucking company the most important thing is the time the tractor can actually drive. If you can monitor these movements through a centralised control tower and electrify the truck movements to the dock, you end up cleaner as well.
Currently, we are designing and testing this scenario. It is not yet fully operational.

E-Commerce carriers are not welcome in Schiphol - courtesy: AMS

So, it is possible to balance the allocated slots with your growth ambition?
“First of all, if you want to grow after 2020 it will have to be in a moderate and sustainable way. The key drivers for the programmes you can develop in this respect are enhanced efficiency supported by advanced data exchange, to speed up the ground movements.”
 
“I have to admit that the terms of conditions of this growth path have not yet been crystallised.
On the other hand, cargo flights make up only 3% of the total movements at AMS.
I advocate a system that can guarantee these 3%, so I would like to have a separate part for freighter operations in the slot allocation.
This is an exception to the rule, and we will have to push for its realisation, hoping for the minister’s final consent.”

Do you have high hopes in this respect?
“The politicians agree on the share of cargo in the entire Schiphol system: only 15% of the passenger flights are profitable, so they are able to survive thanks to the cargo contribution. 
Forwarders will go where you have both belly and freighter capacity and if you take one element out of this system, they will look for alternatives.
I want to bring certainty to the forwarders, the carriers and the employees. That seems to have worked out well.
For the first time, everybody is pulling in the same direction.”

How would you describe the next steps in Schiphol’s development strategy for cargo?
“We have drawn up a business development plan for pharma, a segment I know from my former position as Head of Life Sciences Benelux for the DHL Pharma gateway. We have already developed a kind of format for flowers, together with AF-KLM Cargo and the umbrella organisation Holland Flower Alliance. This may be a good example of how you can look at a common interest within a community. It has enabled us to strengthen our profile as a global flower hub.”

Marcel Schoeters in Amsterdam

 

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