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Forwarders and airlines must be more flexible on capacity
Thursday, 04 March 2010 00:00

Forwarders and airlines need to set up far more flexible capacity agreements to cope with the increasingly difficult task of forecasting demand, according to Kuehne + Nagel (KN).

Tim Scharwath, president for north-west Europe, said the forwarder’s track record and strong relationships with carriers meant it was able, “with difficulties”, to secure the capacity it needed for longstanding customers out of Asia during last year’s frantic fourth-quarter peak season—“but at different rates than we anticipated”.

“The thing to learn, especially from air freight last year, is that you have to be much more flexible than you ever imagined,” he said.

“You cannot go into the market and say ‘I want a year’s volume’, and define this much volume per week or per month. It doesn’t work like that—or at least, it didn’t work last year.”

But rather than greater use of ad hoc capacity, the flexibility needed to deal with the new, more volatile environment, meant working even more closely in partnership with carriers, he said.

“The way volumes went up and down last year, and is continuing this year, there has to be a dual approach from all parties—the carriers and the freight forwarders or customers—in order to find the right amount of volume needed, sometimes, for example, on a different day of the week.

“In the past, it was much more plannable than it is now, or was last year,” added Scharwath. “So maybe we need different IT tools, that show you where there is spare volume available.”

Scharwath said KN had been working on setting up more flexible capacity arrangements, but acknowledged there had been resistance from airlines on agreements out of Asia—the very market where securing capacity was most important.

John Pattullo, CEO of Ceva Logistics, told IFW: “One of the things we are trying to do, in both air and ocean freight, is leverage our global scale, and by having a more centralized approach, we would expect to be able to read the market and respond more intelligently.”

International Freighting Weekly, 3/4/2010